Market Interaction Between Tilapia Imports and US Catfish Production PublicDeposited

Descriptions

Tilapia exports to the US have been claimed to double in the last three years following the two bans on
Vietnamese catfish imports in November 2001 and June 2003. The aim of these bans was to restrict
imports from the major exporter of Catfish (Vietnam) reducing competition for US catfish producers in
the market. Interestingly, the bans on Vietnamese catfish may have indirectly benefited tilapia imports
and in particular, frozen fillets as catfish is mainly imported as frozen fillets into the US market. This
could explain how frozen fillets of tilapia have astonishingly grown by 391% in the last three years.
In this study, we investigate relationships between the prices of frozen fillets from US produced and
Vietnamese imported catfish as well as imports of tilapia frozen fillets to obtain information about their
market structure. Prices were found to be non-stationary so the Johansen test was used as the empirical
tool to investigate possible market integration between these three products. The results indicate frozen
fillets of US produced and Vietnamese catfish imports are integrated, though not perfectly, in the same
market. On the other hand, frozen fillets of tilapia imports have not been found to compete with either
US produced or Vietnamese catfish imports. Tilapia must therefore be taking market share from a
different product in the US market, such as red snapper. These results have important policy implications
as a ban on tilapia imports would not benefit American catfish producers conversely it would severely
affect an industry that is largely taking off in developing countries around Asia and South and Central
America.